Thursday, 10 September 2015

UK POWER NETWORK PERILOUSLY CLOSE TO BLACKOUTS BY 2016 IF WIND DROPS

Picture a cold and dark wintery evening in November and millions of householders across the country are switching on their kettles at the same time after a long day at work but suddenly there is a big problem.

Another creaking coal-fired power station has been shut down and with barely a breeze blowing to fire up the thousands of wind turbines that Britain has increasingly relied upon to keep the lights turned on, the entire electricity network has become overloaded.

Suddenly, the doomsday scenario of a nationwide energy blackout and power curfews on a scale not seen since the bleak winter of enforced economic hardship of 1979 becomes reality.

This is the fear of experts like Anthony Price, director of Electricity Storage Network, who argues that policymakers have allowed the system to become too vulnerable to outages, which could cost the economy billions of pounds in lost output and productivity.

“As a society we run the risk of paying the price eventually for running everything with the very minimum of spare capacity available,” said Mr Price. “If something does go wrong with the existing generating system we really have no where to run to meet demand.”

His concerns were brought into sharper focus last week with the announcement that the Eggborough power station in Yorkshire would close in March 2016. The plant generates around 4pc of the UK’s electricity and its shutdown at the end of the winter will place a further squeeze on the safety cushion for avoiding a blackout across large areas of the country.

Conventional fossil-fuel burning power stations like Eggborough and the Longannet coal-fired plant in Fife that is also due to close in March are still the most reliable means to produce electricity for the grid, despite the dramatic shift over the last decade towards renewables such as wind or solar.
 

“Things are moving into uncharted territory in terms of security of supply,” said Peter Atherton, utilities equity analyst at Jefferies. “We have never had such a low ratio of conventional power plant capacity compared with renewables and the problem is going to get worse.”

The announcement in May by SSE that it would be closing the giant Ferrybridge power station in Yorkshire by March 2016 has also raised the stakes for regulators who are duty bound to ensure Britain has enough power. Based on the recent closures, power supply levels published by Ofgem show that Britain will be perilously close to blackouts by the winter of 2016 if wind levels prove to be too low to generate adequate electricity for the grid.

According to Mr Atherton the problem started with the Labour government under the former Prime Minister Tony Blair which committed Britain to unachievable targets for building renewable energy capacity.

The suspicion is that Mr Blair went into European climate talks in 2007 not even knowing the difference between energy – which covered everything from transportation to home insulation – and electricity. Almost a decade later, this possible schoolboy error by Mr Blair and his negotiating team could lead to blackouts for the “first time in living memory”, Mr Atherton believes.

“Germany and Spain for example don’t have the same security of supply problem as we do. We are unique in that we have a problem with supply and affordability of power,” he said.

The Coalition and the new Conservative Government have essentially continued along with the same unrealistic policy which has committed Britain to generating around 80pc of its power from renewables and nuclear by 2030. Another problem according to Mr Atherton is the need to build more latency into the renewable network.

He estimates that to replace 1 gigawatt of conventional coal or gas generated power capacity it requires the equivalent of around 3.5 gigawatts of renewables.

“The problem is that the closure programme for conventional plants like Eggborough is running to time but the new build programme is now about four years behind schedule. There is a big mismatch between what is getting shut down and what is getting built to replace it,” said Mr Atherton.

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